SoftBank-backed Tier plans to cost its e-scooter batteries in retailers

LONDON – Tier, the Berlin-based mobility start-up backed by Japanese tech giant SoftBank, has a grand plan to fill its rental scooter batteries with juice: they’ll get power in local shops.

The company plans to use a portion of the $ 250 million raised by SoftBank and other investors last November to install battery charging stations in 4,500 stores around the world over the next 12 months.

“We have already signed a lot of deals,” said Lawrence Leuschner, CEO and co-founder of Tier, in an interview with CNBC.

The 37-year-old entrepreneur said the required charging stations, known as PowerBoxes, are roughly one square meter and can be powered from a standard socket. He added that Tier will pay for the electricity that stores use to charge their batteries. According to Tier, the PowerBoxes can charge four batteries in three hours.

To replace a battery, users need to open the Animal app on their phone and check whether the battery of the scooter they are driving or the battery of a nearby scooter needs replacing, which is indicated by a lightning bolt icon.

You then have to drive to the next “SwapSpot” shown in the Tier app, remove the battery with the push of a button, go to the store and swap it for a fully charged one.

What’s in it for drivers and shops?

Drivers who replace the batteries of the e-scooter after the end of their trip will be rewarded with a free ride, while shop owners will benefit from more visitor frequency and – hopefully – income, according to Leuschner.

“The shops in which we replace the batteries achieve a considerable (additional) turnover of around 20,000 euros per year, because something is bought every time someone changes a battery in the shop,” said Leuschner. According to Tier, the figure is based on the average spend by battery changers in stores and local businesses over a one-month period during a trial in Tampere, Finland, last summer.

Around 50 stores have already installed animal charging stations after testing last summer, and the company is now rolling out the charging capsules in other countries where it operates.

Tier plans to equip all vehicles with batteries from the Swedish battery manufacturer Northvolt.

Leuschner said Tier wants to finally open up the energy grid so that other electric vehicle operators can use it to run their own batteries.

European rival

Tier was founded in 2018 as a European competitor to Bird and Lime in the US and has launched electric vehicles in 85 cities in nine countries.

By the end of 2021, the fleet of e-scooters and mopeds is to be expanded from 60,000 to over 100,000. The company plans to launch an undisclosed new vehicle in the third quarter of this year.

In order to pay for new vehicles, Tier is in the process of securing a new round of debt financing, said Leuschner. “We are currently in talks,” said Leuschner, adding that the company had various offers.

Tier had a challenging 2020 as the coronavirus pandemic forced nations to lockdown and pulled potential customers off the streets. However, according to Leuschner, the company was “almost profitable” for the year. “That’s why SoftBank invested in us,” he said.

Looking to the future, Leuschner is trying to prepare for the pandemic, as are European competitors like Voi and Dott.

“We hope the vaccinations work and things go back to normal. Then hopefully we will have a great spring, summer, autumn and a stronger winter than last year. We will definitely grow pretty strong in 2021 versus 2020,” he added.

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